Medicaid Virginia panel punts on expansion

RICHMOND —The legislative panel that's to determine whether Virginia will expand Medicaid didn't decide one way or the other in its last meeting before the General Assembly convenes next month.

But at the end of an occasionally testy meeting on Tuesday, panel members suggested the intensely political question of Medicaid will likely be on the table in January, even if not necessarily by that name.

One place it will emerge will be funding for hospitals, which will be hit by Gov. Bob McDonnell's proposal to continue a freeze on what Medicaid pays for their services, said state Sen. Emmett Hanger, R-Augusta, and Del. Steve Landes, R-Augusta, who serve as chairman and vice chairman of the Medicaid Innovation and Reform Commission.

The other could be legislation for further reforms to Medicaid, the two said.

But divisions on the central issue of whether to use Affordable Care Act funds to expand Medicaid to some 380,000 low-income Virginians remain sharp.

When Hanger, after the panel's meeting, suggested that reform measures and further meetings of the panel could clear the way for a General Assembly vote on expansion, Landes fired off: "Not in the House of Delegates."

"I would hope there's no stonewalling," Hanger replied.

Hanger said there might be a middle ground, made possible by McDonnell's surprise suggestion in his proposed budget to "sunset" any expansion. McDonnell's proposal says that if the General Assembly expands Medicaid, it would have to revisit the decision in 2016, when the state would begin paying some of the cost. Under the Affordable Care Act, Washington picks up 100 percent of the cost of expansion through 2016, which for Virginia would be more than $2 billion a year. After that, the state begins paying a portion, which would gradually grow to reach 10 percent after 2021.

Hanger said the sunset would allow Virginia to tap the more than $2 billion a year for the short term while giving the state time to see if cost-saving reforms can keep the post-2016 cost affordable. If the savings aren't realized, the state would have the option of backing out once it has to start paying some of the cost.

Landes meanwhile signaled there would be a tough sell for one widely floated compromise, called the "private option," similar to one in Arkansas that uses Medicaid expansion funds to buy insurance policies for the poor through the Affordable Care Act's insurance exchanges. People whose incomes are below the federal poverty limit, which is $11,490 for a single person, fall beneath the floor for eligibility for subsidized coverage through the exchanges, but Arkansas won federal permission to buy policies for them, rather than enroll them in Medicaid

"In Arkansas, it is still expansion," Landes said.

And, he added, the private option still leaves open the question of what happens if Washington doesn't make payments to the states.

"We have more questions than we have answers," he said.

Virginia already is counting on one Affordable Care Act promise — that the federal government will increase its share of the cost of health coverage for children of families with incomes too high for Medicaid but less than twice the poverty level. That promise will free up $55 million in 2016 that the state would otherwise pay.

Secretary of Health and Human Resources William A. Hazel warned the panel of a recently uncovered hit Virginia could suffer if it doesn't expand Medicaid — the loss of $500 million over five years in federal funding to care for indigent patients at the state's teaching hospitals. That loss could start to bite in 2017.

Medicaid expansion was supposed to substitute for such payments for hospitals already hit because the Affordable Care Act also mandated cuts in what Medicaid and Medicare pay hospitals for their services.

"We are probably not through the thicket yet," Hanger said at the start of the panel's session. "It's a tough issue."